SC 13D/A

/s/ Mair Faibish

Mair Faibish

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S2IsGWEPF42adUEmRLezzQG5YRuMRj7N5KeLy1X9JnXFAaCHhobs2QffbIhPf3l9 iaWRTAQp3kKIyPPOqOX74Q== 0000950123-08-000194.txt : 20080108 0000950123-08-000194.hdr.sgml : 20080108 20080108154528 ACCESSION NUMBER: 0000950123-08-000194 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20080108 DATE AS OF CHANGE: 20080108 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SYNERGY BRANDS INC CENTRAL INDEX KEY: 0000870228 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & GENERAL LINE [5141] IRS NUMBER: 222993066 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42354 FILM NUMBER: 08517877 BUSINESS ADDRESS: STREET 1: 223 UNDERHILL BLVD CITY: SYOSSET STATE: NY ZIP: 11791 BUSINESS PHONE: 5167148200 MAIL ADDRESS: STREET 1: 223 UNDERHILL BLVD CITY: SYOSSET STATE: NY ZIP: 11791 FORMER COMPANY: FORMER CONFORMED NAME: KRANTOR CORP DATE OF NAME CHANGE: 19930328 FORMER COMPANY: FORMER CONFORMED NAME: DELTA VENTURES INC DATE OF NAME CHANGE: 19600201 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MILLER LLOYD I III CENTRAL INDEX KEY: 0000949119 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 4650 GORDON DRIVE CITY: NAPLES STATE: FL ZIP: 33940 BUSINESS PHONE: 9412628577 SC 13D/A 1 y46159sc13dza.htm AMENDMENT NO. 33 TO SCHEDULE 13D SC 13D/A

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)

(Amendment No. 33)¹

Synergy Brands Inc.

(Name of Issuer)

Common Stock, $.001 per share

(Title of Class of Securities)

87159E402

(CUSIP Number)

Lloyd I. Miller, III, 4550 Gordon Drive, Naples, Florida, 34102 (Tel.) (239) 262-8577

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

December 21, 2007

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box o.

Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.

See Rule 13d-7 for other parties to whom copies are to be sent.

¹ The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

(Continued on following pages)

Page 1 of 7 pages


CUSIP No.		87159E402	13D	Page		2		of		7

NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Lloyd I. Miller, III

###-##-####

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a) o

(b) o

SEC USE ONLY

SOURCE OF FUNDS*

PF-OO

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORGANIZATION

United States

SOLE VOTING POWER

NUMBER OF

2,709,748

SHARES

SHARED VOTING POWER

BENEFICIALLY

OWNED BY

470,224

EACH

SOLE DISPOSITIVE POWER

REPORTING

PERSON

2,709,748

WITH

SHARED DISPOSITIVE POWER

470,224

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

3,179,972

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

30.6%

TYPE OF REPORTING PERSON*

IN-IA-OO

*SEE INSTRUCTIONS BEFORE FILLING OUT!

Page 3 of 7

Introduction

This constitutes Amendment No. 33 (the “Amendment”) to the statement on Schedule 13D, filed on behalf of Lloyd I. Miller, III (“Mr. Miller”), dated September 26, 2001, as amended (the “Statement”), relating to the common stock, par value $0.001 per share (the “Shares”) of Synergy Brands Inc., a Delaware corporation (the “Company”). The Company has its principal executive offices at 223 Underhill Blvd., Syosset, New York 11791. Unless specifically amended hereby, the disclosure set forth in the Statement shall remain unchanged.

Item 3. Source and Amount of Funds or Other Consideration

Item 3 is hereby amended and restated in its entirety as follows:

“Mr. Miller is the investment advisor to the trustee of Trust A-2, A-3, A-4 and Trust C (the “Trusts”). Trusts A-2, A-3 and A-4 were created pursuant to a Declaratory Judgment, signed by the Honorable Wayne F. Wilke for the Court of Common Pleas, Probate Division, Hamilton County, Ohio, on October 27, 1992, pursuant to which Trust A was split into four separate trusts. The Trusts were created pursuant to an Amended and Restated Trust Agreement, dated September 20, 1983 (the “Trust Agreement”). Mr. Miller was named as advisor to PNC Bank, Ohio, N.A. (formerly The Central Trust Company, N.A., Cincinnati, Ohio), the Trustee named in the Trust Agreement. Such appointment became effective on April 22, 1990, the date of death of Lloyd I. Miller, the grantor of the Trusts. All of the Shares purchased by Mr. Miller as advisor to the Trusts were purchased by funds generated and held by the Trusts. The purchase price for the Shares in Trust A-2 was $25,000.00. The purchase price for the Shares in Trust A-3 was $25,000.00. The purchase price for the Shares in Trust A-4 was $1,563,031.59. The purchase price for the Shares in Trust C was $118,341.50.

Mr. Miller is the manager of Milfam LLC, an Ohio limited liability company established pursuant to the Operating Agreement of Milfam LLC (the “Operating Agreement”), dated as of December 10, 1996. Milfam LLC is the managing general partner of (i) Milfam I L.P., a Georgia limited partnership established pursuant to the Partnership Agreement for Milfam I L.P., dated December 11, 1996, and (ii) Milfam II L.P. a Georgia limited partnership established, pursuant to the Partnership Agreement for Milfam II L.P., dated December 11, 1996. All of the Shares Mr. Miller is deemed to beneficially own as the manager of the managing general partner of Milfam I L.P. were purchased with money contributed to Milfam I L.P. by its partners, or money generated and held by Milfam I L.P. All of the Shares Mr. Miller is deemed to beneficially own as the manager of the managing general partner of Milfam II L.P. were purchased with money contributed to Milfam II L.P. by its partners, or money generated and held by Milfam II L.P.

The purchase price for the Shares Mr. Miller is deemed to beneficially own as the manager of the managing general partner of Milfam I L.P. is $2,350,000.00. The $2,350,000.00 number set forth in the immediately preceding sentence does not include the $3,152,500.00 consideration paid by Milfam I L.P. in connection with the transaction that occurred on January 19, 2007 pursuant to which Milfam I L.P. acquired a secured promissory note issued by PHS Group Inc. (“PHS Group”), a Pennsylvania corporation, and a wholly-owned, indirect subsidiary of the Company, in the principal amount of $3,250,000.00 and 537,500 shares of the Company’s unregistered common stock. Furthermore and as more described in Item 4 hereto, Milfam I L.P. also acquired 480,000 shares of the Company’s

Page 4 of 7

unregistered common stock in consideration for the sale by Milfam I L.P. to the Company of the QFB Warrant (as defined below). The purchase price for the Shares Mr. Miller was deemed to beneficially own as the manager of the managing general partner of Milfam II L.P. was $265,850.03.

All of the Shares purchased by Mr. Miller on his own behalf, were purchased with personal funds generated and held by Mr. Miller. The purchase price for the Shares purchased by Mr. Miller on his own behalf was $1,320,443.00. The $1,320,443.00 number set forth in the immediately preceding sentence does not include the $3,152,500.00 consideration paid by Mr. Miller in connection with the transaction that occurred on January 19, 2007 whereby Mr. Miller received a promissory note in the principal amount of $3,250,000.00 and 537,500 shares of the Company’s unregistered common stock.”

Item 4. Purpose of the Transaction

Item 4 of the Statement is hereby amended by adding the following at the end thereof:

“The purpose of this Amendment is to report that since the filing of Amendment No. 32 to the Statement, dated November 21, 2007 (“Amendment No. 32”), a material change occurred in the percentage of Shares beneficially owned by Mr. Miller.

On December 21, 2007, Milfam I L.P. entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the Company. Pursuant to the Stock Purchase Agreement, Milfam I L.P. sold all of its right, title and interest in, to and under a certain common stock purchase warrant (the “QFB Warrant”) to acquire up to fifteen percent (15%) of the shares of common stock, $0.001 par value, on a fully diluted basis, of Quality Food Brands, Inc., a Nevada corporation (“QFB”). QFB is an indirect, majority-owned subsidiary of the Company. In consideration of Milfam I L.P. selling to the Company the QFB Warrant, the Company issued to Milfam I L.P. four hundred and eighty thousand shares (480,000) of the Company’s unregistered shares of common stock. Following the acquisition of the 480,000 shares described above, Mr. Miller’s beneficial ownership materially increased from 27.2% to 30.6%. Reference is made hereto to that certain Form 8-K filed by the Company on December 28, 2007 describing in more detail the terms of the transaction relating to the Stock Purchase Agreement and such information is hereby incorporated by reference thereto. A copy of the Stock Purchase Agreement is hereby attached hereto as Exhibit 99.1.

Except as described above in this Item 4 and herein, Mr. Miller does not have any specific plans or proposals that relate to or would result in any of the actions or events specified in clauses (a) through (j) of Item 4 of Schedule 13D. Miller reserves the right to change plans and take any and all actions that Miller may deem appropriate to maximize the value of his investments, including, among other things, purchasing or otherwise acquiring additional securities of the Company, selling or otherwise disposing of any securities of the Company beneficially owned by him, in each case in the open market or in privately negotiated transactions or formulating other plans or proposals regarding the Company or its securities to the extent deemed advisable by Miller in light of his general investment policies, market conditions, subsequent developments affecting the Company and the general business and future prospects of the Company. Miller may take any other action with respect to the Company or any of the Company’s debt or equity securities in any manner permitted by applicable law.”

Item 5. Interest in Securities of the Issuer

Page 5 of 7

Item 5 of the Statement is hereby amended and restated in its entirety as follows:

(a) Mr. Miller beneficially owns 3,179,972 Shares which is 30.6% of the outstanding shares of the Company (based upon 9,913,700 outstanding Shares as set forth in the Company’s 10Q filed on November 13, 2007 plus the 480,000 outstanding Shares issued in connection with the Stock Purchase Agreement).

As of the date hereof, 404,272 of such beneficially owned Shares are owned of record by Trust A-4; 15,952 of such beneficially owned Shares are owned of record by Trust C; 1,795,500 of such beneficially owned Shares are owned of record by Milfam I L.P.; 45,900 of such beneficially owned Shares are owned of record by Milfam II L.P.; 868,348 of such beneficially owned Shares are owned of record by Mr. Miller directly; 25,000 of such beneficially owned Shares are owned of record by Trust A-2; and 25,000 of such beneficially owned Shares are owned of record by Trust A-3.

(b) Mr. Miller has or may be deemed to have shared voting power and shared dispositive power for all such shares held of record by Trust A-4, Trust C, Trust A-2 and Trust A-3. Mr. Miller has or may be deemed to have sole voting power and sole dispositive power for all such shares held of record by Milfam I L.P., Milfam II L.P. and Mr. Miller directly.

MILFAM I L.P.


Date of Transaction	Number of Shares Acquired	Price Per Share
December 21, 2007	480,000	*


*		These shares were acquired by Milfam I L.P. in connection with a sale by Milfam I L.P. to the Company of the QFB Warrant (as defined above) in exchange for 480,000 shares of unregistered common stock of the Company.

(d) Other than shares held directly by Mr. Miller, persons other than Mr. Miller have the right to receive and the power to direct the receipt of dividends from, or the proceeds from, the sale of the reported securities.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

On December 21, 2007, Milfam I L.P. entered into the Stock Purchase Agreement (as more specifically described in Item 4 above) with the Company. Pursuant to the Stock Purchase Agreement, Milfam I sold all of its right, title and interest in, to and under the QFB Warrant (as described in Item 4 above) to the Company. QFB is an indirect, majority-owned subsidiary of the Company. In consideration of Milfam I L.P. selling to the Company the QFB Warrant, the Company issued to Milfam I

Page 6 of 7

L.P. four hundred and eighty thousand shares (480,000) of the Company’s unregistered shares of common stock. Reference is further made to that certain Form 8-K filed by the Company on December 28, 2007 describing in more detail the terms of the transaction relating to the Stock Purchase Agreement and such information is hereby incorporated by reference thereto.

Item 7. Materials to be Filed as Exhibits

99.1

Stock Purchase Agreement, dated as of December 21, 2007, by and between, Milfam I L.P. and Synergy Brands Inc.

Page 7 of 7

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in the statement is true, complete and correct.

Dated: January 8, 2008


		/s/ Lloyd I. Miller, III
		Lloyd I. Miller, III

EX-99.1 2 y46159exv99w1.htm EX-99.1: STOCK PURCHASE AGREEMENT EX-99.1

Exhibit 99.1

THE SECURITIES TO BE ISSUED PER THE TERMS OF THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED, WHETHER OR NOT FOR CONSIDERATION, UNLESS EITHER THE SAID SECURITIES HAVE BEEN REGISTERED UNDER SAID ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT IS AVAILABLE. IF THE SAID SECURITIES ARE TO BE SOLD OR TRANSFERRED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENT, THE ISSUER MAY, AT ISSUER’S SOLE COST AND EXPENSE, REQUIRE WRITTEN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR SAID ISSUER, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED AND THAT SUCH TRANSFER WILL NOT VIOLATE SAID ACT OR APPLICABLE STATE SECURITIES LAW.

STOCK PURCHASE AGREEMENT

This Agreement is made this 21st day of December, 2007, by and among SYNERGY BRANDS INC., a Delaware corporation with offices at 223 Underhill Blvd., Syosset, NY 11791, (hereinafter referred to as the “Purchaser”), and MILFAM I L.P., a Georgia Limited Partnership, whose address is 4550 Gordon Drive, Naples, Florida 34102(hereinafter referred to as the “Seller”), and provides for the Purchaser to acquire any and all of the Seller’s right, title and interest in, to and under that certain common stock purchase warrant (the “Warrant”) to acquire up to fifteen percent (15%) of the shares of common stock, $0.001 par value (the “Company Common Stock”) on a fully diluted basis, of QUALITY FOOD BRANDS Inc., a Nevada Corporation, (hereinafter referred to as the “Company”), with offices at 317 Front Street, Monroe, Michigan 48161, owned by Seller.

WHEREAS, Purchaser is a publicly traded and Securities and Exchange Commission (“SEC”) reporting company, and, presently, through its wholly owned subsidiary, PHS Group Inc., a Pennsylvania corporation, owns a majority of the presently outstanding Company Common Stock and historically has had and continues to have a significant participation in the Company’s business but does not presently own a sufficient stock interest in the Company to consolidate with the Company for financial reporting purposes, but such reporting consolidation could be accomplished through the purchase the Warrant and such is the designed purpose of this agreement; and

WHEREAS, the Seller owns the Warrant referenced above consisting of a right to purchase up to fifteen percent (15%), on a fully diluted basis, of Company Common Stock and, upon request of Purchaser, Seller has offered to sell to Purchaser and Purchaser has expressed an interest in buying all of Seller’s interest in the Warrant; and

WHEREAS, the Purchaser desires to acquire, on the terms and subject to the conditions reflected below, the Warrant, to seek

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consolidation with the Company for financial reporting purposes; and

WHEREAS, the Seller believes that it is desirable and in the best interests of the Seller and the Company that it sell the Warrant to the Purchaser;

NOW, THEREFORE, the Parties to this Agreement do hereby agree as follows:

ARTICLE I
THE TRANSACTION

1.1 The Transaction. Subject in all instances to each of the terms, conditions, provisions and limitations contained in this Agreement, the Seller shall sell, transfer, convey and assign to the Purchaser, by instruments reasonably satisfactory in form and substance to the Purchaser and its counsel, and the Purchaser shall acquire from the Seller, the Warrant in exchange for the Consideration (as hereinafter defined) (such securities transaction hereinafter being referred to as the “Transaction”) thereby assisting the Company to becoming a consolidated reporting subsidiary of Purchaser.

1.2 Consideration. The Consideration shall be the due and valid issuance to the Seller of four hundred and eighty thousand shares (480,000) (the “Consideration Shares”) of the Purchaser’s authorized but not yet issued common stock, $0.001 par value (the “Purchaser Common Stock”) issuable through authorization to be given to the Purchaser’s transfer agent to issue the Consideration Shares with restrictive legend which authorization shall be provided contemporaneously with the Purchaser’s receipt of the Warrant duly assigned to the Purchaser. By signing this Agreement Purchaser, Synergy Brands Inc., acknowledges and accepts such plan of possible stock issuance and confirms the value likely to be derived by said company from the Transaction being consummated which Transaction is designed to directly benefit Purchaser and its wholly owned above referenced subsidiary, PHS Group Inc., through, among other benefits, the combined disclosure of their financial results of operations with that of the Company. The obligation of the Seller to enter into this Transaction is subject to the issuance and delivery of a stock certificate, registered in the name of the Seller (the “Certificate”), representing the Consideration Shares.

1.3 Closing. The issuance and transfer of the securities as provided herein shall be consummated within 5 days of the date of this Agreement (which may be accomplished by mail) and shall be conditioned upon all parties hereto having fulfilled all covenants and responsibilities stated as applicable to them herein. The date upon which the Seller receives the Certificate representing the Consideration Shares shall be referred to herein as the “Closing Date.” The parties hereto represent that the number of

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Consideration Shares to be issued to Seller has been determined at arm’s length with no guaranty as to marketability or value.

ARTICLE II
REPRESENTATIONS AND
WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to the Seller (which representations and warranties shall be confirmed as of the Closing Date):

2.1 Authority Relative to this Agreement.

(a) The Purchaser has the power and authority to enter into and to perform this Agreement in its name and has received the requisite approval of its Board of Directors and otherwise understands there to be no necessity of any other third party approval, including governmental. This Agreement has been duly and validly executed and delivered by the Purchaser, and constitutes a valid and binding Agreement of the Purchaser, enforceable in accordance with its terms.

(b) The Consideration Shares have been duly authorized and, when issued in accordance with this Agreement, will be free and clear of all liens, charges, restrictions, claims and encumbrances imposed by or through the Purchaser. The issuance and delivery of the Consideration Shares are not subject to any preemptive right of shareholders of the Purchaser or to any right of first refusal or other right in favor of any person. When issued in accordance with this Agreement, the Consideration Shares will be duly authorized, validly issued, fully paid and nonassesable.

2.2 Absence of Breach. The execution, delivery and performance of this Agreement, and the performance by the Purchaser of its obligations hereunder do not (1) conflict with or result in a breach of any of the provisions of the Articles of Incorporation or By-Laws of the Purchaser and all other applicable organizational and operational prerequisites; (2) contravene any law, rule or regulation known to Purchaser of any State or Commonwealth or of the United States, or of any applicable foreign jurisdiction, or any order, writ, judgment, injunction, decree, determination, or award affecting or binding upon the Purchaser, in such a manner as to provide a basis for enjoining or otherwise preventing consummation of the Transaction; (3) conflict with or result in a material breach of or default under any material indenture or loan or credit agreement or any other material agreement or instruments to which Purchaser is a party, in such a manner as to provide a basis for enjoining or otherwise preventing consummation of the Transaction; or (4) require the authorization, consent, approval or license of any third party of such a nature that the failure to obtain the same would provide a basis for

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enjoining or otherwise preventing consummation of the Transaction.

2.3 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with this Agreement or the Transaction or any related transaction of Purchaser based upon any agreements, written or oral, made by or on behalf of Purchaser.

2.4 Investment Intent. Purchaser is acquiring the Warrant for its own account without a view to the sale or other public distribution thereof. The Company is an indirect majority owned subsidiary of the Purchaser and the Purchaser is acquiring the Warrant to, among other benefits, allow the consolidated disclosure of the Purchaser’s financial results with the financial results of operations with that of the Company (as one of the consolidated subsidiaries of the Purchaser).

2.5 Current in Reporting. Purchaser is an SEC Exchange Act and NASDAQ listed reporting public company current in its reporting obligations and in good standing to the best of its knowledge with those and all other applicable regulatory authorities.

2.6 Authorized Capital Stock. The authorized capital stock of the Purchaser consists of shares of Purchaser Common Stock. As of the date of this Agreement, 9,913,700 shares of Purchaser Common Stock were validly issued and outstanding, fully paid and nonassessable. Except as disclosed in SEC Reports (as defined below), there are no options, warrants and convertible securities of the Purchaser, and any other rights to acquire securities of the Purchaser. All outstanding securities of the Parent Company are validly issued, fully paid and nonassessable.

2.7 Issuance of the Consideration Shares. Assuming the accuracy of the representations and warranties of the Seller contained in this Agreement, the offer and issuance of the Consideration Shares will be exempt from the registration requirements of the Securities Act, and will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable federal and state securities laws.

ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLER

The Seller represents and warrants to the Purchaser as follows, (which representations and warranties shall be confirmed as of the Closing Date):

3.1 Organization and Qualification. The Seller, if being an

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entity, is an entity duly organized, validly existing, and in good standing under the laws of its State of domicile and otherwise is in good standing with the requisite power and authority to enter into and to perform this Agreement.

3.2 Authority Relative to this Agreement. This Agreement has been duly and validly executed and delivered by the Seller and constitutes a valid and binding Agreement of the Seller enforceable in accordance with its terms. The Seller, has all requisite corporate power and/or other authority as necessary to enter into this Agreement and to carry out the Transaction contemplated hereby, and their doing so has been duly and sufficiently authorized.

3.3 Absence of Breach; No Consents. The execution, delivery and performance of this Agreement, and the performance by the Seller of their obligations hereunder, do not (1) conflict with or result in a breach of any of the applicable organizational documents of the Seller; (2) contravene any law, ordinance, rule or regulation of any State or Commonwealth or political subdivision of either; (3) conflict with or result in a material breach of or default under any material indenture or loan or credit agreement or any other material agreement or instrument to which the Seller is a party; or (4) require the authorization, consent, approval, or license of any third party, governmental or otherwise.

3.4 Investment Representations.

a) The Consideration Shares to be issued to Seller hereunder have not been registered under the Securities Act of 1933, as amended (the “Act”), and are not freely tradeable. The Consideration Shares must be held indefinitely unless the shares are sold pursuant to an effective registration statement under the Act or pursuant to an available exemption from the registration requirement of the Act.

b) The Purchaser has no obligation to Seller to register for resale any of the Consideration Shares.

c) The Consideration Shares are being acquired for investment for Seller’s own account and not with a view to s distribution thereof in violation of the Act.

d) A legend in substantially the following form shall be affixed to the certificates evidencing the Consideration Shares:

The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”), and may not be sold, pledged, hypothecated, donated, or otherwise transferred, whether or not for consideration, unless either the securities

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have been registered under said Act or an exemption from such registration requirement is available. If the securities are to be sold or transferred pursuant to an exemption from the registration requirement, the issuer may, at issuer’s sole cost and expense, require a written opinion of counsel, reasonably satisfactory to counsel for the issuer, to the effect that registration is not required and that such transfer will not violate said Act or applicable State securities law.

3.5 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with this Agreement or the Transaction or any related transaction of Seller based upon any agreements, written or oral, made by or on behalf of Seller.

ARTICLE VI
COVENANTS OF PURCHASER

4.1 Affirmative Covenants. From the date hereof through the Closing Date, the Purchaser will take every action reasonably required of it in order to satisfy the conditions to closing set forth in this Agreement and otherwise to ensure the prompt and expedient consummation of the Transaction substantially as contemplated by this Agreement, and will exert all reasonable efforts to cause the Transaction to be consummated, provided in all instances that the representations and warranties of the Seller in this Agreement are and remain true and accurate and that the covenants and agreements of the Seller in this Agreement are honored and that the conditions to the obligations of the Purchaser set forth in this Agreement are not incapable of satisfaction.

4.2 Cooperation. The Purchaser shall cooperate with the Seller and its counsel, accountants and agents in every way in carrying out the transactions contemplated herein, and in delivering all documents and instruments deemed reasonably necessary or useful by Counsel to the Seller.

4.3 Expenses. The parties agree to bear their own respective legal and other costs and expenses for preparing, negotiating, executing and delivering this Agreement and consummating the Transaction.

4.4 Publicity. Prior to the Closing any written news releases or other public disclosure by the Purchaser and/or the Company pertaining to this Agreement or the Transaction shall be submitted to the Seller for review and approval prior to release by the Purchaser and/or the Company, and shall be released only in a form approved by the Seller, provided, however, that (a) such approval shall not be unreasonably withheld, and (b) such review and

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approval shall not be required of releases and as to reporting, and/or other disclosure required under applicable SEC, NASDAQ and/or other applicable governmental and/or other regulatory compliance mandates by the Purchaser if prior review and approval would prevent the timely and accurate dissemination of such release as required to comply, in the judgment of Purchaser’s counsel, with any applicable law, rule or policy and as to reporting, and/or other disclosure required under applicable SEC, NASDAQ and/or other applicable governmental and/or other regulatory compliance mandates.

4.5 Current Reporting. Purchaser shall remain current through the Closing on all of its regulatory reporting obligations.

4.6 Reissuance of Consideration Shares. Purchaser agrees to reissue certificates representing the Consideration Shares without the legends set forth above at such time as: (a) the holder thereof is permitted to dispose of such Consideration Shares pursuant to Rule 144(k) under the Securities Act; or (b) upon resale subject to an effective registration statement after such Consideration Shares are registered under the Securities Act. The Purchaser agrees to cooperate with the Seller in connection with all resales pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions deemed reasonably necessary by the Seller to allow such resales provided the Purchaser and its counsel receive reasonably requested representations from the selling Seller and broker, if any, and the Purchaser and its counsel are reasonably satisfied with the validity of such representations.

ARTICLE V
COVENANTS OF THE SELLER

5.1 Affirmative Covenants. From the date hereof through the Closing Date, the Seller will take every action reasonably required of it to satisfy the conditions to Closing set forth in this Agreement and otherwise to ensure the prompt and expedient consummation of the Transaction substantially as contemplated hereby, and will exert all reasonable efforts to cause the Transaction to be consummated, provided in all instances that the representations and warranties of the Purchaser in this Agreement are and remain true and accurate and that the covenants and agreements of the Purchaser in this Agreement are honored and that the conditions to the obligations of the Seller set forth in this Agreement are not incapable of satisfaction.

5.6 Cooperation. The Seller shall cooperate with the Purchaser and its counsel, accountants and agents in every way in carrying out the transactions contemplated herein, and in delivering all documents and instruments deemed reasonably

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necessary or useful by Counsel to the Purchaser.

5.7 Expenses. Whether or not the Transaction is consummated, all costs and expenses incurred by the Seller in connection with this Agreement and the Transaction contemplated hereby shall be the responsibility of and be paid by the Seller, except as otherwise provided herein.

5.8 Publicity. Prior to the Closing any written news releases or other public disclosure by the Seller pertaining to this Agreement or the Transaction shall be submitted to the Purchaser for review and approval prior to release by the Seller, and shall be released only in a form approved by the Purchaser, provided, however, that (a) such approval shall not be unreasonably withheld, and (b) such review and approval shall not be required of releases and as to reporting, and/or other disclosure required under applicable SEC, NASDAQ and/or other applicable governmental and/or other regulatory compliance mandates by the Seller if prior review and approval would prevent the timely and accurate dissemination of such release as required to comply, in the judgment of Seller’s counsel, with any applicable law, rule or policy and as to reporting, and/or other disclosure required under applicable SEC, NASDAQ and/or other applicable governmental and/or other regulatory compliance mandates.

ARTICLE VI
CONDITIONS TO CLOSING

6.1 Conditions to Obligation of Purchaser. The obligation of the Purchaser to effect the Transaction shall be subject to the fulfillment at or prior to the Closing of the following conditions, unless Purchaser shall waive such fulfillment:

1. This Agreement and the Transaction contemplated hereby shall have received all approvals, consents, authorizations and waivers from governmental and other regulatory agencies and other third parties as applicable and required to consummate the Transaction.

2. There shall not be in effect a preliminary or permanent injunction or other order by any federal or State court which prohibits the consummation of the Transaction.

3. The Seller shall have performed in all material respects each of its agreements and obligations contained in this Agreement and required to be performed on or prior to the Closing and shall have complied with all material requirements, rules, and regulations of all regulatory authorities having jurisdiction relating to the Transaction.

4. The representations and warranties of the Seller set forth in this Agreement shall be true in all material respects as

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of the date of this Agreement and as of the Closing Date as if made as of such time.

6.2 Conditions to Obligation of the Seller. The obligation of the Seller to effect the Transaction shall be subject to the fulfillment at or prior to the Closing of the following conditions, unless the Seller shall waive such fulfillment:

1. This Agreement and the Transaction shall have received all applicable approvals, consents, authorization and/or waivers from governmental and other regulatory agencies and other third parties (including lenders, holders of debt securities, lessors and the shareholders of the Purchaser, if and as applicable) required by law to consummate the Transaction.

2. There shall not be in effect a preliminary or permanent injunction or other order by any federal or State authority which prohibits the consummation of the Transaction.

3. The Purchaser shall have performed in all material respects its agreements and obligations contained in this Agreement required to be performed on or prior to the Closing.

4. The representations and warranties of the Purchaser set forth in this Agreement shall be true in all material respects as of the date of this Agreement and as of the Closing Date as if made as of such time.

5. Purchaser shall be current in all applicable regulatory reporting.

6. Seller and its counsel will have received (a) the Certificate and (b) copies of a certificate of the Secretary or an authorized officer of the Purchaser dated as of the date of this Agreement and certifying that attached thereto is a true and complete copy of all resolutions adopted by the Board of Directors of the Purchaser authorizing the execution, delivery and performance by the Purchaser of this Transaction and the issuance, payment and delivery of the Consideration Shares by the Purchaser to the Seller.

7. Seller will have received an opinion of counsel from counsel for the Purchaser reasonably satisfactory to the Seller and the Seller’s counsel.

ARTICLE VII
AMENDMENT, WAIVER

No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by the parties, and no waiver of any provision of this Agreement, nor consent to any departure by either party from it, shall be effective unless it is

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in writing and signed by the affected party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of a party to exercise, and no delay in exercising, any right or remedy under this Agreement shall operate as a waiver by such party, nor shall any single or partial exercise of any right or remedy under this Agreement preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies of each party provided herein (a) are cumulative and are in addition to, and are not exclusive of, any rights or remedies provided by law and (b) are not conditional or contingent on any attempt by such party to exercise any of its rights or remedies under any other related document or against the other party or any other entity.

ARTICLE VIII
CONFIDENTIALITY

The existence of this Agreement and all confidential information furnished by one party to the other related thereto will be kept in confidence. This confidentiality requirement does not relate to information that (i) was known to a party prior to the disclosure by the other party; (ii) is or becomes generally available to the public other than by breach of this Agreement; (iii) is provided by one party for disclosure concerning such party in a proxy statement, information statement or registration statement; (iv) otherwise becomes lawfully available to a party on a non-confidential basis from a person not under an obligation of confidence to the other party or (v) is disclosed if required to do so by any law, court, regulation, subpoena or other legal process (including any public filings required to be made to the SEC) or if its attorneys advise it that it has a legal obligation to do so or that failure to do so may result in it incurring a liability to any other entity.

ARTICLE IX
GENERAL PROVISIONS

9.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or mailed by registered or certified mail (return receipt requested), or is sent by telefax to the parties at the address as stated at the outset hereof (or at such other address for a party as shall be specified by like notice given at least five (5) days prior thereto).

9.2 Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

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9.3 Survival of Representations, Warranties, Et Cetera. The representations, warranties, covenants, and agreements of the parties contained herein shall survive the Closing.

9.4 Miscellaneous. This Agreement (1) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the parties, with respect to the subject matter hereof, except as specifically provided otherwise or referred to herein, so that no such external or separate agreements relating to the subject matter of this Agreement shall have any effect or be binding, unless the same is referred to specifically in this Agreement, or is executed by the parties after the date hereof; (2) is not intended to confer upon any other person any rights or remedies hereunder; (3) shall not be assigned by operation of law or otherwise except as specifically authorized herein; and (4) shall be governed in all respects, including validity, interpretation and effect, by the internal laws of the State of New York without regard to the principles of conflict of laws thereof and all parties submit themselves to the jurisdiction of the courts in the State of New York if such courts are called upon to decide any issue relating to this Agreement and Counsel for the respective parties are authorized to accept service of process to such parties in such court proceedings. This Agreement may be executed in two or more counterparts which together shall constitute a single agreement.

9.5 Further Assurances. The parties hereto agree to (i) execute and deliver, or cause to be executed and delivered, all such other and further agreements, documents and instruments and (ii) take or cause to be taken all such other and further actions as any party may reasonably request to effectuate the intent and purposes, and carry out the terms, of this Agreement.

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be signed on the date first written above by their respective officers thereunto duly authorized.

MILFAM I L.P., as the Seller


By:	Milfam LLC
Its:	General Partner

By:	/s/ Lloyd I. Miller, III

	Name:	Lloyd I. Miller, III
	Title:	Manager

SYNERGY BRANDS INC., as the Purchaser

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